Canada’s premiers are calling on Ottawa to give small businesses more time to pay back their COVID-19 loans.
In a joint to Prime Minister Justin Trudeau, the premiers are calling for a one-year extension to repay Canadian Emergency Business Account (CEBA) loans.
They also want to see the deadline for partial loan forgiveness to be extended.
“Canadian small business owners have faced many challenges over the last few years,” said the letter.
“Now, just as many small businesses are starting to find their feet after the pandemic, they are facing new cost pressures from rising inflation and interest rates.”
Small businesses and not-for-profits were eligible to receive up to $60,000 in loans between April 9, 2020, and June 30, 2021.
The federal government has said it provided $49 billion in interest-free loans to nearly 900,000 small businesses and not-for-profit organizations.
They currently have until Jan. 18, 2024, to pay back their debt in order to qualify for partial loan forgiveness of up to 33 per cent.
After that, outstanding loans will convert to three-year term loans with a five per cent annual interest rate, with a repayment deadline of Dec. 31, 2026.
“More time is needed to allow the hardest hit small businesses to continue their recovery from not only the pandemic, but the cost shocks that came after,” said the premiers.
The Canadian Federation of Independent Business (CFIB) is backing the premier’s call for a repayment extension.
According to CFIB, only half of small firms are back to 2019 levels of sales and the average business has taken on $100,000 in new debt just to survive.
